How is MER charged?

[rilhouse]

Just wondering how exactly the MER of a MF is charged? Is this a yearly charge or charged when you buy units?

[Financial Highway]

MER is an annual rate but depending on the MF company it is charged either monthly or quarterly to your funds and charged directly to the fund. You do not pay MER during purchase or sales, you may pay sales charges depending on how you buy your units.

so if your MER is 2.5% that is the annual rate divide that by 12 0.208% is the monthly charge now multiply that by your fund and thats the monthly amount.

[mfd]

MERs are charged yearly I think

depending on the mutual fund there can be additional front-loading or back-loading fees that are charged when you buy or sell the mutual fund.

The one thing I'm not sure is how transparent the charges are. I've owned mutual funds in the past and still own 1 mutual fund...I've never seen a charge though I really don't pay attention to those statements. Bad MFD!

[rilhouse]

I just started investing in MF last July with TD eFunds. As of yet I don't see any MER charges from any fund I own. I guess I should call TD and ask them when they charge MER.

[CanadianCapitalist]

I just started investing in MF last July with TD eFunds. As of yet I don't see any MER charges from any fund I own. I guess I should call TD and ask them when they charge MER.

MER is charged automatically and the unit price reported is after deducting any fees. It doesn't appear as a separate fee, which is probably why a lot of average investors have no idea how much in investment fees they are paying.

[lb71]

MER is charged automatically and the unit price reported is after deducting any fees. It doesn't appear as a separate fee, which is probably why a lot of average investors have no idea how much in investment fees they are paying.And why a lot of fund companies can get away with the high MERs they charge. You look at your statement and see your funds went up 7% from last year, and you are happy, not realizing that if it was not for the 3% MER your funds would have gone up 10%. Over time those MERs will add up.

[Mike H.]

MERs are charged yearly I think

depending on the mutual fund there can be additional front-loading or back-loading fees that are charged when you buy or sell the mutual fund.

The one thing I'm not sure is how transparent the charges are. I've owned mutual funds in the past and still own 1 mutual fund...I've never seen a charge though I really don't pay attention to those statements. Bad MFD!

Generally, MERs are charged daily. If the MER is 2.5%, the daily cost on closing unit value would be expressed as 0.025/365.